On July 1, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Incorporated The articles of incorporation state that the corporation will sell 40,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following business activities occur during July for Great Adventures. Purchase a one-year insurance policy for $3,960 ($330 per month) to cover injuries to participants during outdoor clinics. Purchase office supplies of $1,600 on account. July 1 July 1 Sell $20,000 of common stock to Suzie. Sell $20,000 of common stock to Tony. July 1 July 2 Pay legal fees of $1,100 associated with incorporation. July 4 July 7 July 8 July 15 July 22 July 24 July 30 Pay $210 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic. Purchase 10 mountain bikes, paying $14,100 cash. On the day of the clinic, Great Adventures receives cash of $3,500 in total from 70 bikers. Tony and Suzie conducts the mountain biking clinic. Because of the success of the first mountain biking clinic, Tony and Suzie holds another mountain biking clinic and the company receives $3,800. Pay $630 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $140 in advance or $190 on the day of the clinic. Great Adventures receives total cash of $8,400 in advance from 60 kayakers for the upcoming kayak clinic. The following transactions occur over the remainder of 2024. August 1 August 4 August 10 Great Adventures obtains a $40,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. The company purchases 14 kayaks, paying $24,700 cash. Tony and Suzie conduct the first kayak clnic. In addition to the $8,400 that was received in advance from kayakers on July 30, the company receives additional cash of $3,800 from twenty new kayakers on the day of the clinic. Tony and Suzie conducts a second kayak clinic, and the company receives $10,600 cash. Office supplies of $1,600 purchased on July 4 are paid in full. August 17 August 24 September 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $2,880 ($240 per month) in advance. September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $14,400 cash. October 17 December 1 December 5 December 8 Tony and Suzie conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $18,200 cash. Tony and Suzie decide to hold the company's first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $570. To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $30 in salary for each team that competes in the race. His salary will be paid after the race. The company pays $1,500 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. December 12 The company purchases racing supplies for $2,300 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. December 15 The company receives $22,800 cash from a total of forty teams, and the race is held. December 16 The company pays Victor's salary of $1,200. December 31 The company pays a dividend of $3,900 ($1,950 to Tony and $1,950 toyuzie). December 31 Using his personal money, Tony purchases a diamond ring for $5,200. Irony surprises Suzie by proposing that they get married. Suzie accepts and they get married! The following information relates to year-end adjusting entries as of December 31, 2024. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,400. b. Six months' of the one-year insurance policy purchased on July 1 has expired. c. Four months of the one-year rental agreement purchased on September 1 has expired. d. Of the $1,600 of office supplies purchased on July 4, $330 remains. e. Interest expense on the $40,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,300 of racing supplies purchased on December 12, $210 remains. g. Suzie calculates that the company owes $13,700 in income taxes.